Policy Shift By Nation’s Largest Insurer Could Leave Some With Unexpected Bills

Some St. Louis area residents face the prospect of getting stuck with hefty medical bills because of a recent change by the nation’s largest health insurer.

Minnetonka, Minn.-based UnitedHealthcare, which covers approximately one-fourth of Missourians, has changed the way it handles something known as “balance billing” — the difference between the provider’s charge and the amount allowed by the insurer.

The insurer’s move this year, designed to force down costs, means the insurer won’t pay the bills of some emergency room physicians and other specialists even though they work for hospitals in the UnitedHealthcare network.

That could leave a customer with health insurance coverage stuck with thousands of dollars in unexpected expenses.

This copyrighted story comes from the St. Louis Post-Dispatch, produced in partnership with KHN. All rights reserved.

“This is an issue that has been cropping up around the country,” said Cheryl Fish-Parcham of Families USA, an advocacy group. “We are very concerned about it.”

A Post-Dispatch analysis of UnitedHealthcare’s network and data provided by insurance brokers shows that about one-fifth of area hospitals in the carrier’s network had out-of-network emergency room doctors as of last month. A smaller number of UnitedHealthcare hospitals also have out-of-network anesthesiologists, radiologists and pathologists.

UnitedHealthcare previously would pay almost all of the bill from the emergency room doctors who performed services at an in-network hospital. But now UnitedHealthcare says it would scale back how much it would pay. It will now only pay the prevailing out-of-network rate, leaving the remainder of the bill to patients.

UnitedHealthcare blames the hospitals that contract out their emergency care to other providers who may or may not be in the insurer’s network.

In a statement to the Post-Dispatch, UnitedHealthcare said it is “deeply concerned that some hospital-based physicians are establishing out-of-network strategies to seek excessively high reimbursement levels, sometimes more than 10 times what an in-network physician would charge for the same service.”

UnitedHealthcare and other insurers say those prices are what lead them to alter their practice when it comes to paying the out-of-network bills.

A 2011 study by America’s Health Insurance Plans, an industry trade group, found that the amount billed for out-of-network emergency room care was on average 1,355 percent higher than what Medicare would have paid.

Not all UnitedHealthcare customers will be affected by the change. It does not alter coverage for those with individual plans or those whose employer is self-insured.

For workplaces with fewer than 50 workers, the billing change took effect on Jan. 1. Larger businesses will see the effects for bills after March 1.

Consumers have little recourse when hit by balance billing. They can negotiate directly with the provider and try to get a lower bill. Or they can just pay up. UnitedHealthcare added that it is “committed to supporting our members with information to help them avoid out-of-network bills whenever possible.”

The Missouri Department of Insurance said consumers can call the state’s complaint hotline at 1-800-726-7390 if they have a problem with their claim. A spokesman said balance billing cases would be examined on a case-by-case basis.

One way to resolve the issue would be for the out-of-network emergency room contractors to join UnitedHealthcare’s network.

Many of the local UnitedHealthcare-network hospitals with out-of-network emergency room doctors are run by SSM Health. SSM contracts with the Louisiana-based Schumacher Group for emergency services.

In a statement to the Post-Dispatch, Schumacher said patients are not currently being balance billed and that they are only responsible to meet coinsurance and deductible obligations. It said it’s looking for ways to join insurance networks.

“On behalf of the health care providers, we cooperatively negotiate with every insurance company in good faith to obtain fair and reasonable rates of reimbursement that adequately recognize the high-quality emergency care delivered every day,” the Schumacher Group said in a statement.

Other insurers have struggled with balance billing. A few years ago Anthem Blue Cross Blue Shield, Missouri’s largest insurer, reduced the amount it paid when members were billed by an out-of-network doctor. It resolved the backlash by entering into agreements with providers.

“We work very hard to keep all ER physicians in our networks so that members are not surprised with a non-network ER physician,” said Anthem spokeswoman Deb Wiethop. “All of the ER physicians in the greater St. Louis area have contracts with Anthem.”

But Coventry Health Care said it still covers the whole cost of balance billing.

“For us, members will be covered if they are treated by an out-of-network ER doctor and won’t be held responsible for balance billing from an out-of-network ER doctor,” said Rohan Hutchings, a spokesman.

States have also sought to regulate the practice. Most states ban balance billing for Medicaid managed care recipients. Roughly half bar it for private insurance customers.

Missouri prevents companies from balance billing some of its Medicaid population, but it has no restriction for private plans.

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